Try FileDisk (also comes bundled with WinImage):
FileDisk is a virtual disk driver for Windows that uses one or more files to emulate physical disks. A console application is included that let you dynamically mount and unmount files. An example of use for this driver is if you have made plans spending the weekend writing a RAID driver for NT but find you are short of disks. FileDisk can also use CD/DVD images.
FileDisk will use sparse files as disk images if the underlying file system supports it. A sparse file is a file where suficiently large blocks of zeros aren't allocated disk space. To see how much disk space a file actually uses right click on the file and choose Properties. If you for example create a sparse file of 4GB, mount it in FileDisk and format it to NTFS, it will only take up 24MB on disk but look like a normal disk of 4GB. When you copy files to it the used disk space will automatically increase.
filedisk /mount <devicenumber> <filename> [size[k|M|G] | /ro | /cd] <drive:>
filedisk /umount <drive:>
filedisk /status <drive:>